Melbourne manufacturing company commits to change after underpaying steelworkers $100K

31 October 2017 

Seven Melbourne workers will be repaid more than $100,000 after the Fair Work Ombudsman executed an enforceable undertaking with an Altona-based manufacturing company.

Transfab Reinforcement Australia Pty Ltd, which prepares prefabricated housing materials, underpaid the seven workers $103,918 as a result of paying them low flat rates between March 2015 and September last year.

The workers were all of Indian background and most spoke limited English.

Several of the workers were visa holders, including two international students.

The Fair Work Ombudsman investigated after receiving requests for assistance from the workers last year.

The workers were employed to bend and weld steel on a production line in Altona. Six of the workers were engaged as full-time or casual factory hands, with the other a qualified welder.

The workers were paid flat hourly rates of generally between $18 and $22.

However, under the Manufacturing and Associated Industries and Occupations Award 2010, they were variously entitled to higher rates for ordinary hours, casual loading, regular shift work, and Saturday and overtime hours, among other entitlements.

For example, the worker with the largest individual underpayment of $33,454, an international student who worked as a factory hand, was entitled to hourly rates of up to $20.94 for afternoon or night shifts, up to $27.32 on Saturdays, up to $36.42 for some overtime hours and up to $45.53 on public holidays.

Transfab also failed to pay workers’ full annual leave entitlements and to keep all necessary employment records, including of hours worked.

The company cooperated fully with the investigation and has rectified all underpayments.

As an alternative to litigation, the Fair Work Ombudsman has executed an Enforceable Undertaking (EU) with the company whereby Transfab admits to contraventions of the law and must take rectification action.

In addition to repaying the workers, the EU requires Transfab to make a $5000 donation to community workplace law centre Job Watch.

It must also provide a letter of apology to the workers and display notices detailing the company’s breaches in the workplace and on the company’s website.

The company must also commission professional audits of its compliance with workplace laws across the next three years and rectify any breaches; provide staff training on workplace laws; register with the Fair Work Ombudsman’s online My Account portal and develop processes for future compliance.

Acting Fair Work Ombudsman Kristen Hannah said an EU was the appropriate enforcement tool given the company’s cooperation, lack of any previous non-compliance issues with the agency, and its proactive and full back-payments.

“EUs have allowed us to achieve strong outcomes against companies that breach workplace laws without the need for civil court proceedings, which require a greater investment of taxpayer resources and can significantly extend the time it takes for workers to receive their entitlements.”

“These are vulnerable workers and executing an EU with Transfab means we could get their money into their pockets where it belongs as soon as possible.

“Breaching the terms of an EU is grounds for litigation and the community can be assured that we will be monitoring Transfab to ensure they comply with the terms of this undertaking,” Ms Hannah said.

Ms Hannah said the agency was particularly concerned about cases involving underpayment of overseas workers and international students.

The Fair Work Ombudsman recently published an open letter to international students to encourage them to seek free help from the agency if they experience any issues while working in Australia.

“We are conscious that overseas workers can be vulnerable due to a lack of awareness of their entitlements, language barriers and a reluctance to complain,” Ms Hannah said.

Ms Hannah said employers were expected to take action – including seeking advice if necessary – to ensure they knew the work entitlements of their staff.

“We are committed to helping employers understand and comply with workplace laws, but operators need to make a genuine effort to get the basics right in the first place,” she said.

The Fair Work Ombudsman offers a range of free tools and resources for employers at www.fairwork.gov.au including the Pay and Conditions Tool (PACT) to assist business owners to calculate pay rates applicable to their business.

In 2015-16, a total of $3.85 million in underpaid wages and entitlements was returned to 2132 employees as a result of their employers entering into Enforceable Undertakings with the Fair Work Ombudsman.

Employers and employees can seek assistance at www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94. A free interpreter service is available on 13 14 50.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.

Download the Transfab Reinforcement Australia Pty Ltd Enforceable Undertaking (DOCX 160.2KB)  (PDF 1MB)

Media inquiries:

Matthew Raggatt, Senior Media Adviser
Mobile: 0466 470 507
matthew.raggatt@fwo.gov.au

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